Corporate Compliance

Note from Hugh

Medicare Insider, November 6, 2007

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There are three issues that I would like to address this week. First, if you have not yet had a chance to start poring through the Outpatient Prospective Payment System final rule, you should set aside some time to do so sooner rather than later. Some of the changes will have a very significant impact on hospitals from both an operational and a financial perspective.

Second, in last week's Medicare Weekly Update, we reported on an October 19 CMS transmittal revising certain CMS manual instructions relating to orders for diagnostic tests. We noted that CMS indicated in the transmittal that most of the information provided in the transmittal is not applicable in a hospital setting. We have since been contacted by a reader who asked why the transmittal is not applicable to services furnished in a hospital setting.

Although not clear from the transmittal, I suspect the answer is that the transmittal is intended to provide interpretative guidance on certain diagnostic test regulations that CMS does intend to apply to hospitals.  Those regulations are set forth in 42 CFR 410.32.

Section 410.32 is titled "Diagnostic x-ray tests, diagnostic laboratory tests, and other diagnostic tests: Conditions" and, at first blush, appears to be broadly applicable to diagnostic tests furnished in any setting. However, in the 1998 Medicare Physician Fee Schedule Final Rule (published in the October 21, 1997, Federal Register), CMS stated:

    [Section §410.32] generally addresses diagnostic tests covered under section 1861(s)(3) of the Act and payable by Part B carriers rather than fiscal intermediaries. Regulations other than §410.32 govern the coverage of diagnostic tests furnished to hospital patients, which are payable through fiscal intermediary payment mechanisms. Specifically, the coverage of diagnostic tests furnished to hospital outpatients is addressed in §410.28, and the coverage of diagnostic tests furnished to hospital inpatients is addressed in §409.16. Therefore, the test ordering policy adopted in the final rule of November 22, 1996, effective for procedures furnished beginning January 1, 1997, does not apply to diagnostic tests furnished in hospitals.

Finally, in the October 2 Medicare Weekly Update, I reported that CMS representatives had commented during the September hospital Open Door Forum conference call that Medicare does not permit "retroactive" inpatient admissions. I noted, however, that CMS had previously issued guidance (in early 2003) suggesting that if a hospital must perform an emergency "inpatient only" procedure on an outpatient, the hospital may admit the patient (presumably immediately after the surgery) and bill the procedure as an inpatient service, notwithstanding the fact that the patient was an outpatient at the time the procedure was performed.

In a follow-up to the Open Door Forum call, I emailed CMS asking whether hospitals should consider the prohibition of retroactive admissions announced on the Open Door Forum call to constitute a change in the 2003 guidance permitting hospitals to admit a patient after an emergency "inpatient only" procedure.

I response to my email, I received a telephone call from a senior CMS representative.  In follow-up to that call, I received an email from CMS last week. In that email, the CMS representative stated:

    First, at the next hospital open door call, time permitting, we'll clarify what was discussed during last month's call related to the meaning of "retroactive" admissions. (I say "time permitting" because much of the next hospital open door call will, of course, be focused on the CY 2008 OPPS final rule. If we don't get to the inpatient/outpatient issue in November, it'll be picked up during the December call.)
    Secondly, we've taken the various questions you've presented, including the follow-up question that you sent in your Oct 11 email, and prepared several Q&As to address your concerns. Because these questions may be of broader interest, our plan is to post them on the CMS website. I'm hoping we can have things ready so we can make an announcement on Thursday, but if not then, we'll get word out as soon as the Q&As are posted.

It appears that those of us that are interested in this issue should plan to participate in this week's Open Door Forum conference call (dial in information is listed below) and should be on the look out for new Q&As on this issue to be posted on CMS' freqently asked questions Web page.




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